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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