Core Viewpoint - The article emphasizes the importance of the Zacks Rank system and the Style Scores system in identifying undervalued stocks, particularly highlighting Berkshire Hills Bancorp (BHLB) as a strong value investment opportunity [1][3]. Company Analysis - Berkshire Hills Bancorp (BHLB) holds a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [4]. - The stock has a Forward P/E ratio of 9.27, significantly lower than the industry average of 12.12, suggesting it may be undervalued [4]. - BHLB's Forward P/E has fluctuated between a high of 13.21 and a low of 9.27 over the past year, with a median of 11.18 [4]. - The company has a P/B ratio of 0.96, which is favorable compared to the industry's average P/B of 1.49, indicating solid market value relative to book value [5]. - BHLB's P/B ratio has ranged from a high of 1.27 to a low of 0.88 in the past year, with a median of 1.06 [5]. - The P/CF ratio for BHLB is 16.38, which is lower than the industry's average P/CF of 23, further supporting the notion of undervaluation [6]. - Over the past 12 months, BHLB's P/CF has varied from a high of 32.23 to a low of 10.72, with a median of 22.84 [6]. - Overall, these metrics suggest that BHLB is likely undervalued and presents an impressive value stock opportunity based on its earnings outlook [7].

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]

Core Viewpoint - The U.S. equities market experienced a decline due to concerns over recent tariff impositions by Trump, which may impact the profitability of many U.S. companies engaged in global trade [1] Group 1: Investment Recommendations - In the current market environment, it is suggested that investors consider low-leverage stocks as safer investment options to mitigate potential losses [2] - Recommended stocks include Berkshire Hills Bancorp (BHLB), Sportradar Group (SRAD), Nextracker (NXT), The Greenbrier Companies (GBX), and Fox Corp. (FOX), all of which exhibit low leverage [2] Group 2: Understanding Leverage - Leverage refers to the practice of companies borrowing capital to operate and expand, typically through debt financing, which can be riskier than equity financing [4] - Excessive debt financing can lead to significant losses, making it crucial for investors to avoid companies with high debt levels [5] Group 3: 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] - During economic downturns, companies with high debt-to-equity ratios may face challenges despite previously strong earnings [8] Group 4: Screening Criteria for Stocks - A prudent investment strategy involves selecting stocks with 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 50,000 or more [10][11] - Additional criteria include a percentage change in earnings per share (EPS) greater than the industry median, a VGM Score of A or B, and a Zacks Rank of 1 or 2 [12] Group 5: Company Highlights - **Berkshire Hills Bancorp (BHLB)**: Reported a 28% year-over-year growth in operating EPS and a projected 30% increase in 2025 sales [13][14] - **Sportradar Group (SRAD)**: Achieved a long-term earnings growth rate of 49.8% and a 15.5% expected sales increase for 2025 [15][16] - **Nextracker (NXT)**: Recorded a backlog exceeding $4.5 billion and a 57.44% average earnings surprise over four quarters [17][18] - **The Greenbrier Companies (GBX)**: Reported net earnings of $55 million with a long-term earnings growth rate of 11.7% [19][20] - **Fox Corp. (FOX)**: Achieved a long-term earnings growth rate of 7.1% and a significant earnings surprise of 31.82% in the last quarter [20][21]

Core Insights - Berkshire Hills Bancorp (BHLB) reported revenue of $110.02 million for the quarter ended December 2024, a decrease of 12.3% year-over-year, but exceeded the Zacks Consensus Estimate of $104.59 million by 5.19% [1] - The company's EPS was $0.60, an increase from $0.47 in the same quarter last year, surpassing the consensus estimate of $0.54 by 11.11% [1] Financial Performance Metrics - Efficiency Ratio was reported at 62.4%, better than the estimated 65.9% by analysts [4] - Net interest margin (FTE) was 3.1%, slightly below the average estimate of 3.2% [4] - Average balance of total earning assets was $11.08 billion, compared to the estimated $11.18 billion [4] - Total non-interest income reached $23.33 million, exceeding the average estimate of $20.41 million [4] - Net interest income was reported at $86.86 million, slightly above the estimated $86.74 million [4] Stock Performance - Shares of Berkshire Hills have returned +0.5% over the past month, while the Zacks S&P 500 composite increased by +1.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Earnings and Profitability - Fourth quarter operating EPS increased by 3% quarter-over-quarter and 28% year-over-year, reaching $0.60, while full year 2024 operating EPS was $2.22, up 4% from 2023[3][4][10] - Net income for the quarter ended December 31, 2024, was $19,657,000, a decrease of 47.5% from $37,509,000 in the previous quarter[20] - Operating net income increased to $25,982,000, up from $24,789,000 in the previous quarter, reflecting a growth of 4.8%[20] - The dividend declared per common share remained stable at $0.18, with a dividend payout ratio of 39.40%[20] - Return on equity for the quarter was 7.18%, down from 14.29% in the previous quarter[20] - The company reported a net income of $19,657 for Q4 2024, a turnaround from a loss of $1,445 in Q4 2023, with annual net income decreasing to $61,003 from $69,598[26] - Basic earnings per share for Q4 2024 was $0.46, compared to a loss of $0.03 in Q4 2023, while diluted earnings per share also improved to $0.46 from a loss of $0.03[26] - Net income for 2024 was $61.003 million, down 12.5% from $69.598 million in 2023[45] - Earnings per common share, diluted, decreased to $1.43 in 2024 from $1.60 in 2023[45] Revenue and Income Sources - Total net revenue for Q4 2024 was $110,180, up from $80,038 in Q4 2023, with annual revenue slightly decreasing to $400,000 from $411,829[26] - Total non-interest income for Q4 2024 was $23,325, a significant recovery from a loss of $8,383 in Q4 2023, contributing to an annual total of $48,414 compared to $42,782[26] - Total non-interest income increased to $82.110 million in 2024, up 21.0% from $67.839 million in 2023[45] - Total operating revenue for 2024 was $433.696 million, slightly down from $436.886 million in 2023[45] Assets and Liabilities - Total assets reached $12,273 million, an increase of 5.8% from $11,605 million in the previous quarter[20] - Total assets as of December 31, 2024, were $11,596 million, a decrease from $11,862 million on December 31, 2023[30] - Total deposits increased to $10,375 million, a significant increase of 8.3% from $9,577 million in the previous quarter[20] - Total deposits increased to $9,659 million, with a total funding liabilities of $10,261 million[30] - Total shareholders' equity increased by $97 million, or 9%, to $1.2 billion, supported by a successful $100 million common stock issuance[15] - The company’s common shareholders' equity stood at $1,095 million, up from $966 million a year ago[30] Loans and Credit Quality - Average deposits grew by 3% and average loans increased by 0.4% quarter-over-quarter, with total loans rising by $173 million, or 2%, to $9.4 billion[3][13] - Total loans increased to $9,385 million, up 1.9% from $9,212 million in the previous quarter[20] - Non-performing loans to total loans remained stable at 0.26%, with delinquent and non-performing loans at 0.52%, the lowest level in nearly two decades[3][17] - The allowance for credit losses increased to $115 million, up from $112 million in the previous quarter, reflecting a cautious approach to asset quality[20] - Non-performing loans as a percentage of total loans remained stable at 0.26% for both the current and previous quarters[20] - The provision for loan credit losses was $6,000 thousand for the quarter, with an ending balance of $114,700 thousand in the allowance for credit losses[33] - The company reported net loans charged-off of $3,347 thousand for the quarter, with a net charge-off rate of 0.14%[33] Operational Efficiency - The efficiency ratio improved to 62.4%, reflecting better operational efficiency compared to prior periods[4][11] - The efficiency ratio improved to 62.43%, compared to 63.74% in the previous quarter, indicating better cost management[20] - The efficiency ratio for 2024 was 63.94%, slightly up from 63.88% in 2023[45] Mergers and Acquisitions - The company announced a merger agreement with Brookline Bancorp, Inc., aiming to create a leading Northeast banking franchise[4][7] Tax and Regulatory - The effective tax rate for Q4 was 26%, with an operating income tax rate of 21%[12] - The effective tax rate for the quarter ending March 31, 2024, was 26.1%[41] Other Financial Metrics - The return on tangible common equity was 9.9% for Q4 2024, with a common equity Tier 1 ratio of 13.0%[3][4] - Total average shareholders' equity increased to $1,044 million in 2024 from $984 million in 2023[45] - Total tangible shareholders' equity at the end of the period rose to $1,152 million, compared to $993 million in 2023[45]

Core Viewpoint - Berkshire Hills Bancorp (BHLB) reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and showing an increase from $0.47 per share a year ago, indicating a positive earnings surprise of 11.11% [1] Financial Performance - The company achieved revenues of $110.02 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.19%, although this represents a decline from year-ago revenues of $125.48 million [2] - Over the last four quarters, Berkshire Hills has consistently surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance and Outlook - Berkshire Hills shares have increased by approximately 0.5% since the beginning of the year, underperforming compared to the S&P 500's gain of 2.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] Earnings Estimate Revisions - The trend for earnings estimate revisions for Berkshire Hills is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $0.52 on revenues of $105.93 million, and for the current fiscal year, it is $2.47 on revenues of $552.54 million [7] Industry Context - The Financial - Savings and Loan industry, to which Berkshire Hills belongs, is currently ranked in the top 20% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8]

Core Points - Berkshire Hills Bancorp, Inc. is scheduled to release its fourth quarter 2024 earnings on January 30, 2025, at approximately 7:30 a.m. Eastern Time [1] - A conference call will follow the earnings release on the same day at 9:00 a.m. Eastern Time, with options for both a live webcast and a dial-in number [1][2] - The company has $11.6 billion in assets and operates 83 financial centers across New England and New York, focusing on community-driven banking solutions [3] Earnings Release Details - Earnings Release Date: January 30, 2025, at 7:30 a.m. Eastern [1] - Conference Call Time: January 30, 2025, at 9:00 a.m. Eastern [1] - Webcast Registration Link: https://events.q4inc.com/attendee/539841607 [1] - Dial-in Number: Toll Free: (800) 715-9871; Conference ID 6567963 [1] - Webcast Replay Link: https://ir.berkshirebank.com [1] Company Overview - Berkshire Hills Bancorp, Inc. is the parent company of Berkshire Bank, which is community-focused and relationship-driven [3] - The bank offers a range of services including commercial, retail, private banking, and wealth solutions [3] - Headquarters located in Boston, Massachusetts [3]

Core Viewpoint - Berkshire Hills Bancorp, Inc. (BHLB) has agreed to acquire Brookline Bancorp, Inc. (BRKL) in an all-stock transaction valued at approximately $1.14 billion, expected to close by September 30, 2025, pending regulatory and shareholder approvals [1][2][3] Transaction Details - Upon closure, Brookline will merge into Berkshire, and Brookline Bank will merge into Berkshire Bank, with a new name and ticker symbol to be announced [2] - Berkshire will pay 0.42 shares of its common stock for each share of Brookline [3] - Berkshire plans to issue $100 million of its common stock at $29 per share to support the pro forma bank's balance sheet and regulatory capital ratios [4] Financial Metrics - Brookline Bancorp has approximately $11.7 billion in assets, $9.8 billion in total loans, and $8.7 billion in deposits as of September 30, 2024 [4] - The combined entity is expected to have around $24 billion in total assets, $19 billion in total loans, and $18.3 billion in total deposits [5] - Berkshire anticipates a 14% and 40% accretion to its earnings per share for 2025 and 2026, respectively, assuming successful execution of cost savings [9] Strategic Rationale - The merger is expected to enhance BHLB's deposit mix and expand its footprint, with a top 10 deposit market share in 14 out of 19 Metropolitan Statistical Areas [7] - Cost savings of 12.6% of combined non-interest expenses are anticipated, with one-time pre-tax merger expenses estimated at $93 million [8] - The transaction aligns with Berkshire's long-term inorganic growth strategy, emphasizing strategic buyouts for revenue and cost benefits [12] Governance and Future Outlook - The board of the combined entity will consist of eight directors from each company [6] - Berkshire expects to increase its dividend to $1.29 per share annually post-closure [6] - The tangible book value is projected to dilute by 16.7%, with an earn-back period of approximately 2.9 years [10]

Core Viewpoint - Berkshire Hills Bancorp and Brookline Bancorp have announced a merger agreement valued at approximately $1.1 billion, creating a combined entity with $24 billion in assets and 148 branch offices, enhancing their scale and market presence in the Northeast [1][4]. Merger Details - The merger will involve an all-stock transaction where each Brookline share will be exchanged for 0.42 shares of Berkshire, valuing Brookline at $12.68 per share based on Berkshire's closing price of $30.20 on December 13, 2024 [1][10]. - Berkshire plans to raise $100 million in capital to support the merger, issuing common stock at $29.00 per share, with the capital raise expected to close on December 19, 2024 [2]. Strategic Benefits - The merger is expected to create a $24 billion franchise, allowing for significant economies of scale, enhanced lending capacity, and improved competitive positioning across five states with limited overlap [4]. - The combined organization aims to deliver exceptional client experiences and create greater shareholder value through enhanced operational performance and strong risk management practices [5][6]. Governance and Leadership - The Board of Directors of the combined company will consist of eight directors from each institution, with David Brunelle serving as Chairperson and Paul A. Perrault as President and CEO [7][8]. - The combined bank will be structured into six regions, each led by experienced local leaders from both Berkshire and Brookline, allowing for efficient operations while maintaining local market autonomy [9]. Transaction Structure - Berkshire will be the legal acquirer, while Brookline will be treated as the accounting acquirer, consolidating existing bank charters into one Massachusetts state-chartered bank [11]. - The combined company will announce a new name and ticker symbol prior to closing, with headquarters located in Boston, MA [12]. Timeline and Approvals - The transaction is expected to close by the end of the second half of 2025, pending regulatory approvals and shareholder votes [13].