Berkshire Hills Reports Strong Earnings Growth

Core Insights - Berkshire Hills Bancorp reported a strong second quarter for 2025, with operating earnings increasing by 36% year-over-year, driven by revenue growth and lower expenses [2][6][10] - The company is preparing for a transformative merger with Brookline Bancorp, which is expected to enhance its market position in the Northeast [2][11] Financial Performance - Net income for Q2 2025 was $30.4 million, or $0.66 per share, compared to $25.7 million, or $0.56 per share in Q1 2025, and $24.0 million, or $0.57 per share in Q2 2024 [1][6] - Operating earnings reached $31.6 million, or $0.69 per share, reflecting a 14% increase linked quarter and a 36% increase year-over-year [1][6] - Net interest income increased to $91.9 million, up 2% from the previous quarter, with a net interest margin of 3.27%, a 3 basis point increase linked quarter [3][15] Asset Quality - Non-performing loans represented 0.27% of total loans, with delinquent and non-performing loans at 0.48% [3][15] - The provision for credit losses decreased by $1.5 million linked quarter, totaling $4.0 million for the quarter [3][15] Efficiency and Returns - The efficiency ratio improved to 56.7%, the best quarterly result since 2019, down from 59.5% linked quarter [5][6] - Operating return on tangible common equity advanced to 10.8%, with a return on average assets of 1.03% [2][3] Growth Metrics - Total loans increased by $70 million, or 1%, to $9.5 billion, primarily driven by a 4% increase in commercial and industrial loans [8][9] - Total deposits rose by $99 million, or 1%, to $10.0 billion, with a year-over-year increase of $541 million, or 7% [9][10] Merger and Future Outlook - The merger with Brookline Bancorp is expected to close in 2025, pending regulatory approvals, with Berkshire shareholders projected to own approximately 55% of the combined entity [11][12] - The merger aims to create a more powerful financial institution, enhancing service capabilities in the Northeast [2][11]