Berkshire Hills Bancorp Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Berkshire Hills Bancorp Inc. has filed its 2023 annual report (10-K) detailing its financial performance and business operations for the fiscal year ending December 31, 2023.</b>

AI Summary

BERKSHIRE HILLS BANCORP INC (BBT) filed a Annual Report (10-K) with the SEC on February 28, 2024. Berkshire Hills Bancorp Inc. filed its 2023 Form 10-K on February 28, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is banking, with additional revenue streams from bank servicing, mortgage banking, insurance, and asset management fees. The filing includes financial data for the fiscal years 2021, 2022, and 2023. Berkshire Hills Bancorp Inc. is incorporated in Delaware and headquartered in Boston, MA.

Why It Matters

For investors and stakeholders tracking BERKSHIRE HILLS BANCORP INC, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Berkshire Hills Bancorp's financial health, operational segments, and strategic direction for investors and stakeholders. The detailed financial statements and risk factor disclosures are crucial for understanding the company's performance in the current economic climate and its preparedness for future challenges.

Risk Assessment

Risk Level: medium — BERKSHIRE HILLS BANCORP INC shows moderate risk based on this filing. The company operates in the highly regulated banking sector, facing risks related to interest rate fluctuations, credit quality, and competition, as detailed in its risk factors.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess Berkshire Hills Bancorp's performance and outlook.

Revenue Breakdown

Key Numbers

• 2023-12-31 — Fiscal Year End (Period of Report)
• 2024-02-28 — Filing Date (Date Filed)
• 2023 — Fiscal Year (Filing Year)

Key Players & Entities

• BERKSHIRE HILLS BANCORP INC (company) — Filer name
• 60 STATE STREET (address) — Business and Mail Address
• BOSTON (location) — Business and Mail Address City
• MA (location) — Business and Mail Address State
• DE (location) — State of Incorporation

FAQ

Industry Context

Berkshire Hills Bancorp operates within the savings institutions sector, focusing on banking and related financial services.

Regulatory Implications

As a financial institution, Berkshire Hills Bancorp is subject to extensive regulation by federal and state authorities, impacting its operations and compliance requirements.

What Investors Should Do

1. Review the full 10-K for detailed financial statements and segment performance.
2. Analyze the risk factors section to understand potential challenges and mitigation strategies.
3. Compare key financial metrics with prior years and industry benchmarks.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K
• 2024-02-28: Filing Date — Date the 10-K was officially filed with the SEC

Year-Over-Year Comparison

This filing is the 2023 annual report, providing year-end financial data and operational updates compared to previous filings.

Key Financial Figures

• $0.01 — ich registered Common stock, par value $0.01 per share BHLB New York Stock Exchange
• $20.73 — illion, based upon the closing price of $20.73 as quoted on the New York Stock Exchang
• $250,000 — ITEM 1 TABLE 7 — MATURITY OF DEPOSITS > $250,000 15 PART II 43 ITEMS 7 - 7A . 45
• $12.4 billion — ervices. At year-end 2023, the Bank had $12.4 billion in assets and 96 full-service financial
• $493 million — nd negligible indoor mall exposure. The $493 million office portfolio was approximately 66%
• $2 million — ith credit needs generally ranging from $2 million to $25 million. Asset based lending inv
• $25 million — ds generally ranging from $2 million to $25 million. Asset based lending involves monitorin
• $77 million — 022 and the remaining portfolio totaled $77 million at December 31, 2023. 44 Business Cap
• $90 million — 022 and the remaining portfolio totaled $90 million at December 31, 2023. 8 Table of Con

Filing Documents

• bhlb-20231231.htm (10-K) — 5902KB
• ex212023.htm (EX-21) — 17KB
• ex2312023.htm (EX-23.1) — 2KB
• ex3112023.htm (EX-31.1) — 14KB
• ex3122023.htm (EX-31.2) — 15KB
• ex3212023.htm (EX-32.1) — 8KB
• ex3222023.htm (EX-32.2) — 8KB
• ex972023.htm (EX-97) — 18KB
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• 0001108134-24-000003.txt (&nbsp;) — 31372KB
• bhlb-20231231.xsd (EX-101.SCH) — 127KB
• bhlb-20231231_cal.xml (EX-101.CAL) — 286KB
• bhlb-20231231_def.xml (EX-101.DEF) — 995KB
• bhlb-20231231_lab.xml (EX-101.LAB) — 1689KB
• bhlb-20231231_pre.xml (EX-101.PRE) — 1321KB
• bhlb-20231231_htm.xml (XML) — 7335KB

BUSINESS

BUSINESS 4 ITEM 1A.

RISK FACTORS

RISK FACTORS 28 ITEM 1B. UNRESOLVED STAFF COMMENTS 39 ITEM 1C. CYBERSECURITY 40 ITEM 2.

PROPERTIES

PROPERTIES 41 ITEM 3.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 42 ITEM 4. MINE SAFETY DISCLOSURES 42 PART II 43 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 43 ITEM 6. [ RESERVED ] 44 ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 45 ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 65 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 67 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 67 ITEM 9A.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 67 ITEM 9B. OTHER INFORMATION 67 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 67 PART III 68 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 69 ITEM 11.

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 72 2 Table of Contents ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS 72 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 73 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 73 PART IV 74 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 74 ITEM 16 . FORM 10-K SUMMARY 76

SIGNATURES

SIGNATURES 77 TABLE INDEX PART I 4 ITEM 1. 4

TABLE 1 — LOAN PORTFOLIO ANALYSIS

ITEM 1 TABLE 1 — LOAN PORTFOLIO ANALYSIS 5

TABLE 2 — MATURITY AND SENSITIVITY OF LOAN PORTFOLIO

ITEM 1 TABLE 2 — MATURITY AND SENSITIVITY OF LOAN PORTFOLIO 9

TABLE 3 — CREDIT QUALITY RATIOS

ITEM 1 TABLE 3 — CREDIT QUALITY RATIOS 11

TABLE 4 — ALLOCATION OF ALLOWANCE BY LOAN CATEGORY

ITEM 1 TABLE 4 — ALLOCATION OF ALLOWANCE BY LOAN CATEGORY 12

TABLE 5 — WEIGHTED AVERAGE YIELD ON SECURITIES

ITEM 1 TABLE 5 — WEIGHTED AVERAGE YIELD ON SECURITIES 13

TABLE 6 — AVERAGE BALANCE AND WEIGHTED AVERAGE RATES FOR DEPOSITS

ITEM 1 TABLE 6 — AVERAGE BALANCE AND WEIGHTED AVERAGE RATES FOR DEPOSITS 15

TABLE 7 — MATURITY OF DEPOSITS > $250,000

ITEM 1 TABLE 7 — MATURITY OF DEPOSITS > $250,000 15 PART II 43 ITEMS 7 - 7A . 45

TABLE 1 — AVERAGE BALANCES, INTEREST AND AVERAGE YIELD COSTS

ITEM 7 TABLE 1 — AVERAGE BALANCES, INTEREST AND AVERAGE YIELD COSTS 48

TABLE 2 — RATE VOLUME ANALYSIS

ITEM 7 TABLE 2 — RATE VOLUME ANALYSIS 49

— 7A TABLE 3 — QUALITATIVE ASPECTS OF MARKET RISK

ITEM 7 — 7A TABLE 3 — QUALITATIVE ASPECTS OF MARKET RISK 66 3 Table of Contents PART I

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the Securities Exchange Act), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements from the use of the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment and inflation, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that Berkshire Hills Bancorp files with the Securities and Exchange Commission, including the Risk Factors in Item 1A of this report. Because of these and other uncertainties, Berkshire's actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, Berkshire's past results of operations do not necessarily indicate Berkshire's combined future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. Berkshire is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. Berkshire qualifies all of its forward-looking statements by these cautionary stateme

– Table 1 – – Loan Portfolio Analysis

Item 1 – Table 1 – – Loan Portfolio Analysis 2023 2022 2021 (In millions) Amount Percent of Total Amount Percent of Total Amount Percent of Total Loans: Construction $ 640 7.1 % $ 320 3.9 % $ 324 4.7 % Commercial multifamily 599 6.6 620 7.5 516 7.6 Commercial real estate owner occupied 629 7.0 641 7.7 607 8.9 Commercial real estate non-owner occupied 2,607 28.8 2,496 29.9 2,157 31.6 Commercial and industrial 1,359 15.1 1,445 17.3 1,285 18.8 Residential real estate 2,760 30.5 2,312 27.7 1,489 21.8 Home equity 224 2.5 227 2.7 252 3.7 Consumer other 221 2.4 274 3.3 196 2.9 Total $ 9,039 100.0 % $ 8,335 100.0 % $ 6,826 100.0 % Allowance for credit losses (105) (96) (106) Net loans $ 8,934 $ 8,239 $ 6,720 There is further information about the above components of the loan portfolio, and the risk characteristics relevant to each portfolio segment, in the "Loans and Related Allowance for Credit Losses" footnote to the financial statements referenced in Item 8 of this report. There is also information about the loan portfolio and changes in the portfolio during 2023 in Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report. There is reference made to Commercial and Retail Loans, as well as to Commercial Real Estate loans. Commercial Real Estate loans include Construction, Commercial Multi-Family, Commercial Real Estate Owner Occupied, and Commercial Real Estate Non-Owner Occupied. Commercial loans include Commercial Real Estate loans and Commercial and Industrial Loans. Retail loans include Residential Real Estate loans and Consumer loans, which are comprised of Home Equity loans and Consumer other loans. 5 Table of Contents Commercial Real Estate. The Bank originates commercial real estate loans on properties used for business purposes such as retail, multifamily, office, healthcare, hospitality, industrial, and manufacturing facilities. Commercial real estate loans are provided on owner-occupie

- Table 2B - Total loans due after one year as of December 31, 2023 - fixed and variable interest rates

Item 1 - Table 2B - Total loans due after one year as of December 31, 2023 - fixed and variable interest rates (In thousands) Fixed Interest Rate Variable Interest Rate Total Loans: Construction $ 187,736 $ 451,656 $ 639,392 Commercial multifamily 129,014 469,567 598,581 Commercial real estate owner occupied 230,994 394,911 625,905 Commercial real estate non-owner occupied 1,070,743 1,501,040 2,571,783 Commercial and industrial 393,534 875,950 1,269,484 Residential real estate 1,813,349 946,726 2,760,075 Home equity 3,421 220,733 224,154 Consumer other 214,207 6,319 220,526 Total $ 4,042,998 $ 4,866,902 $ 8,909,900 Loan Administration. Lending activities are governed by a loan policy approved by the Board's Risk Management, Capital, and Compliance Committee. Internal staff perform and monitor post-closing loan documentation review, quality control, and commercial loan administration. The lending staff assigns a risk rating to all commercial loans,

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