The following is a summary of the Berkshire Hills Bancorp, Inc. (BHLB) Q3 2024 Earnings Call Transcript:
Financial Performance:
BHLB reported Q3 operating EPS of $0.58, a 5% increase from the previous quarter and a 16% year-over-year increase.
Operating net income was $24.8 million, marking a 7% increase from the previous quarter and a 15% year-over-year increase.
Net interest income was $88.1 million, slightly down by less than 1% from the previous quarter.Total operating revenue increased by 1% linked quarter with operating expenses concurrently rising by 1% linked quarter but falling 2% year-over-year.
The company observed a net charge-off of $5.6 million or 24 basis points of average loans, which included a $1.9 million from the sale of part of their Upstart loan portfolio.
Business Progress:
BHLB has completed the sale of 10 branches in New York, resulting in a pre-tax gain of $16 million and reducing the total branches to 83.
Continued investment in digital banking upgrades through the rollout of Berkshire One, enhancing customer deposit experience.
The bank has maintained strong capital ratios with CET1 at 11.9% and TCE at 9.1%, supporting ongoing organic loan growth.
Opportunities:
The bank expects declines in funding costs as the Fed continues to cut interest rates, which would further optimize operations and potentially enhance profitability.
Risks:
The sale of Upstart loan portfolio resulted in a $1.9 million charge-off, highlighting potential risks in loan portfolio sales and management.
Expressed concerns about global economic uncertainties affecting a disciplined management approach towards deposit growth, expenses, and overall asset quality.
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