Berkshire Hills Bancorp delivered results in line with Wall Street’s revenue expectations for the second quarter, while reporting notable improvement in profitability. Management pointed to successful execution of its cost reduction initiatives and steady loan growth as key factors supporting the quarter’s performance. CEO Nitin Mhatre highlighted that Berkshire’s digital deposit program has gained traction, bringing in over $100 million in new deposits. The ongoing focus on expense management enabled improved operating leverage, with operating expenses declining 7% year-over-year. Management also noted that asset quality metrics remained stable with low net charge-offs and nonperforming loans.
Is now the time to buy BHLB? Find out in our full research report (it’s free).
Berkshire Hills Bancorp (BHLB) Q2 CY2025 Highlights:
- Revenue: $113.7 million vs analyst estimates of $113.3 million (4.6% year-on-year growth, in line)
- Adjusted EPS: $0.69 vs analyst estimates of $0.59 (16.6% beat)
- Adjusted Operating Income: $43.02 million vs analyst estimates of $40.88 million (37.8% margin, 5.2% beat)
- Market Capitalization: $1.14 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Berkshire Hills Bancorp’s Q2 Earnings Call
- Laura Havener Hunsicker (Seaport Research Partners) asked about the timing and impact of the FHLB funding reduction on margins. CFO Brett Brbovic explained that the reduction matched deposit growth and was not tied to a specific event.
- Hunsicker (Seaport Research Partners) inquired about upcoming maturities in CDs or borrowings. Brbovic replied that there are no significant maturities expected in the next quarter.
- Hunsicker (Seaport Research Partners) questioned the jump in C&I nonperforming loans and charge-offs. Chief Risk Officer Gregory Lindenmuth stated these were due to a handful of small credits with no broader trend.
- Hunsicker (Seaport Research Partners) sought clarification on the drop in SBA loan sale gains. COO Sean Gray attributed it to normalization after strong prior quarters, with current pipeline volume described as healthy.
- Hunsicker (Seaport Research Partners) asked about the impact of the new FASB CECL update on tangible book dilution from the merger. Brbovic said it is too early to quantify, but management is assessing the implications as guidance is finalized.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will focus on (1) the pace and execution of Brookline Bancorp merger integration, (2) sustained digital deposit growth and its impact on funding costs, and (3) ongoing expense control and realization of targeted cost synergies. Additionally, we will monitor credit quality trends and any regulatory developments affecting the merger timeline.
Berkshire Hills Bancorp currently trades at $25.04, down from $26.20 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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