Berkshire Hills Bancorp Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Berkshire Hills Bancorp Inc. has submitted its Q1 2024 10-Q filing, detailing financial performance and position as of March 31, 2024.</b>

AI Summary

BERKSHIRE HILLS BANCORP INC (BBT) filed a Quarterly Report (10-Q) with the SEC on May 10, 2024. Berkshire Hills Bancorp Inc. filed its 10-Q report for the quarterly period ended March 31, 2024. The filing covers financial activities from January 1, 2024, to March 31, 2024. Key financial data from the previous quarter (ending December 31, 2023) and the same quarter last year (ending March 31, 2023) are referenced. The report includes details on various financial statement line items such as deposit accounts, loan sales, and asset management fees. Shareholder equity components like common stock, additional paid-in capital, retained earnings, and treasury stock are detailed as of various dates.

Why It Matters

For investors and stakeholders tracking BERKSHIRE HILLS BANCORP INC, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial performance and position of Berkshire Hills Bancorp Inc., crucial for assessing the company's health and strategic direction. The detailed financial data, including comparisons to prior periods, allows for trend analysis and evaluation of the bank's operational efficiency and profitability.

Risk Assessment

Risk Level: medium — BERKSHIRE HILLS BANCORP INC shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q), which typically contains routine financial information. However, the complexity of financial institutions means that specific disclosures within the report could reveal material information impacting the company's valuation.

Analyst Insight

Review the detailed financial statements and footnotes within the 10-Q to identify any significant changes in revenue, expenses, loan portfolio quality, or capital adequacy compared to prior periods.

Key Numbers

• 2024-03-31 — Reporting Period End Date (Conformed period of report)
• 2024-05-10 — Filing Date (Filed as of date)
• 2023-03-31 — Prior Year Quarter End Date (Comparison period)
• 2023-12-31 — Prior Quarter End Date (Comparison period)

Key Players & Entities

• BERKSHIRE HILLS BANCORP INC (company) — Filer name
• 2024-03-31 (date) — Conformed period of report
• 2024-05-10 (date) — Filed as of date
• 60 STATE STREET (address) — Business address street 1
• BOSTON (address) — Business address city
• MA (address) — Business address state
• 02109 (address) — Business address zip
• 617-641-9206 (phone) — Business phone

FAQ

Industry Context

Berkshire Hills Bancorp Inc. operates within the banking and savings institutions sector, subject to regulatory oversight and market dynamics common to financial services.

Regulatory Implications

As a financial institution, Berkshire Hills Bancorp Inc. is subject to regulations from various bodies including the SEC, Federal Reserve, and state banking authorities, impacting its operations and reporting.

What Investors Should Do

1. Analyze the balance sheet for changes in loan loss provisions and deposit composition.
2. Review the income statement for trends in net interest income and non-interest income.
3. Examine disclosures related to capital adequacy ratios and liquidity.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-10: Filing Date — Date the 10-Q report was officially filed with the SEC.

Year-Over-Year Comparison

This filing represents the company's first quarterly report for the fiscal year 2024, providing updated financial information compared to the previous quarter (Q4 2023) and the same quarter in the prior year (Q1 2023).

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share BHLB The New York Stock Excha

Filing Documents

• bhlb-20240331.htm (10-Q) — 3885KB
• q12024ex311.htm (EX-31.1) — 16KB
• q12024ex312.htm (EX-31.2) — 16KB
• q12024ex321.htm (EX-32.1) — 7KB
• q12024ex322.htm (EX-32.2) — 7KB
• bhlb-20240331_g1.jpg (GRAPHIC) — 73KB
• 0001108134-24-000011.txt (&nbsp;) — 22647KB
• bhlb-20240331.xsd (EX-101.SCH) — 94KB
• bhlb-20240331_cal.xml (EX-101.CAL) — 212KB
• bhlb-20240331_def.xml (EX-101.DEF) — 760KB
• bhlb-20240331_lab.xml (EX-101.LAB) — 1165KB
• bhlb-20240331_pre.xml (EX-101.PRE) — 992KB
• bhlb-20240331_htm.xml (XML) — 5771KB

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) Note 1 Basis of Presentation 9 Note 2 Branch Sale 10 Note 3 Trading Securities 11 Note 4 Securities Available for Sale, Held to Maturity, and Equity Securities 12 Note 5 Loans and Allowance for Credit Losses 17 Note 6 Deposits 32 Note 7 Borrowed Funds 32 Note 8 Derivative Financial Instruments and Hedging Activities 34 Note 9 Leases 42 Note 10 Capital Ratios and Shareholders' Equity 44 Note 11 (Loss)/Earnings per Share 47 Note 12 Stock-Based Compensation Plans 48 Note 13 Fair Value Measurements 49 Note 14 Net Interest Income after Provision/(Benefit) for Credit Losses 58 Note 15 Tax Equity Investments 59 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 60

Selected Financial Data

Selected Financial Data 60 Average Balances and Average Yields/Rates 62 Non-GAAP Financial Measures 63 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 75 Item 4.

Controls and Procedures

Controls and Procedures 76 PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 77 Item 1A.

Risk Factors

Risk Factors 78 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 79 Item 3. Defaults Upon Senior Securities 79 Item 4. Mine Safety Disclosures 79 Item 5. Other Information 79 Item 6. Exhibits 80

Signatures

Signatures 81 2 Table of Contents PART I

CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) BERKSHIRE HILLS BANCORP, INC. CONSOLIDATED BALANCE SHEET March 31, 2024 December 31, 2023 (In thousands, except share data) Assets Cash and due from banks $ 111,676 $ 148,148 Short-term investments 1,082,019 1,055,096 Total cash and cash equivalents 1,193,695 1,203,244 Trading securities, at fair value 5,909 6,142 Equity securities, at fair value 12,823 13,029 Securities available for sale, at fair value 625,857 1,022,285 Securities held to maturity (fair values of $ 459,626 and $ 476,228 ) 531,820 543,351 Federal Home Loan Bank stock 20,522 22,689 Total securities 1,196,931 1,607,496 Less: Allowance for credit losses on held to maturity securities ( 61 ) ( 68 ) Net securities 1,196,870 1,607,428 Loans held for sale 6,345 2,237 Total loans 9,085,753 9,039,686 Less: Allowance for credit losses on loans ( 107,331 ) ( 105,357 ) Net loans 8,978,422 8,934,329 Premises and equipment, net 57,832 68,915 Other intangible assets 18,460 19,664 Cash surrender value of bank-owned life insurance policies 243,777 242,309 Other assets 368,190 341,757 Assets held for sale 83,020 10,938 Total assets $ 12,146,611 $ 12,430,821 Liabilities Demand deposits $ 2,261,794 $ 2,469,164 NOW and other deposits 793,492 858,644 Money market deposits 3,411,672 3,565,516 Savings deposits 1,010,630 1,053,810 Time deposits 2,405,384 2,686,250 Total deposits 9,882,972 10,633,384 Short-term debt 210,000 260,000 Long-term Federal Home Loan Bank advances and other 127,169 125,223 Subordinated borrowings 121,425 121,363 Total borrowings 458,594 506,586 Other liabilities 297,663 278,630 Liabilities held for sale 497,459 — Total liabilities $ 11,136,688 $ 11,418,600 (continued) March 31, 2024 December 31, 2023 Shareholders' equity Common stock ($ 0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 43,414,610 shares outstanding in 2024; 51,903,190 shares issued and 43,500,8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1. BASIS OF PRESENTATION The Consolidated Financial Statements (the "financial statements") of Berkshire Hills Bancorp, Inc. and its subsidiaries (the "Company" or "Berkshire") have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the "Bank"), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank's consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted. The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and disclosures Berkshire Hills Bancorp, Inc. previously filed with the Securities and Exchange Commission in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods. Reclassifications Certain items in prior financ

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Future Application of Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The ASU requires disclosure in the rate reconciliation table of additional categories of information and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating; however, the adoption is not expected to have a material impact on the Company's Consolidated Financial Statements. NOTE 2. BRANCH SALE The Company has entered into definitive agreements with three buyers to sell ten of its upstate and eastern New York branches, consisting of eight offices in Albany, Saratoga, Schenectady and Columbia counties, one office in Whitehall and one office in East Syracuse. The branch sale includes residential mortgages and consumer loans with a total balance of $ 58.5 million and deposit accounts with a total balance of $ 484.5 million as of March 31, 2024. The sales also include all branch premises, including leased properties, and equipment. These balances are included in assets held for sale and liabilities held for sale on the Consolidated Balance Sheet. The sales exclude Berkshire's commercial banking business. The buyers intend to offer employment to all associated staff. The sales are targeted for completion by the end of the third quarter of 2024 subject to customary regulatory approvals and associated system conversions. The following is a summary of the assets and liabilities associated with the branch s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3. TRADING SECURITIES The Company holds a tax-advantaged economic development bond accounted for at fair value. The security had an amortized cost of $ 6.0 million and $ 6.2 million, and a fair value of $ 5.9 million and $ 6.1 million, at March 31, 2024 and December 31, 2023, respectively. As discussed further in Note 8 - Derivative Financial Instruments and Hedging Activities, the Company entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there were no other securities in the trading portfolio at March 31, 2024 or December 31, 2023. 11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4. SECURITIES AVAILABLE FOR SALE, HELD TO MATURITY, AND EQUITY SECURITIES The following is a summary of securities available for sale, held to maturity, and marketable equity securities: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance March 31, 2024 Securities available for sale U.S Treasuries $ 7,880 $ — $ ( 4 ) $ 7,876 Municipal bonds and obligations 64,384 240 ( 2,102 ) 62,522 — Agency collateralized mortgage obligations 282,460 — ( 66,747 ) 215,713 — Agency mortgage-backed securities 288,094 — ( 53,454 ) 234,640 — Agency commercial mortgage-backed securities 88,302 — ( 18,444 ) 69,858 — Corporate bonds 38,721 64 ( 4,193 ) 34,592 — Other bonds and obligations 655 67 ( 66 ) 656 — Total securities available for sale 770,496 371 ( 145,010 ) 625,857 — Securities held to maturity Municipal bonds and obligations 244,100 262 ( 19,819 ) 224,543 41 Agency collateralized mortgage obligations 109,825 — ( 18,809 ) 91,016 — Agency mortgage-backed securities 46,555 — ( 8,543 ) 38,012 — Agency commercial mortgage-backed securities 129,620 — ( 25,263 ) 104,357 — Tax advantaged economic development bonds 1,442 — ( 22 ) 1,420 20 Other bonds and obligations 278 — — 278 — Total securities held to maturity 531,820 262 ( 72,456 ) 459,626 61 Equity securities 15,035 — ( 2,212 ) 12,823 — Total $ 1,317,351 $ 633 $ ( 219,678 ) $ 1,098,306 $ 61 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Allowance December 31, 2023 Securities available for sale U.S Treasuries $ 7,980 $ 1 $ — $ 7,981 $ — Municipal bonds and obligations 64,788 494 ( 1,429 ) 63,853 — Agency collateralized mortgage obligations 426,986 — ( 79,112 ) 347,874 — Agency mortgage-backed securities 492,633 2 ( 75,155 ) 417,480 — Agency commercial mortgage-backed securities 174,879 — ( 29,553 ) 145,326 — Corporate bonds 43,291 34 ( 4,210 ) 39,1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the three months ended March 31, 2024 and 2023: (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at December 31, 2023 $ 48 $ 20 $ 68 (Benefit)/provision for credit losses ( 7 ) — ( 7 ) Balance at March 31, 2024 $ 41 $ 20 $ 61 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total Balance at December 31, 2022 $ 66 $ 25 $ 91 (Benefit)/provision for credit losses ( 17 ) ( 3 ) ( 20 ) Balance at March 31, 2023 $ 49 $ 22 $ 71 Credit Quality Information The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization. As of March 31, 2024, none of the Company's investment securities were delinquent or in non-accrual status. The amortized cost and estimated fair value of available for sale ("AFS") and held to maturity ("HTM") securities segregated by contractual maturity at March 31, 2024 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable. Available for s

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Securities available for sale and held to maturity with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows: Less Than Twelve Months Over Twelve Months Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair (In thousands) Losses Value Losses Value Losses Value March 31, 2024 Securities available for sale U.S Treasuries $ 4 $ 7,876 $ — $ — $ 4 $ 7,876 Municipal bonds and obligations 191 22,706 1,911 25,139 2,102 47,845 Agency collateralized mortgage obligations — — 66,747 215,713 66,747 215,713 Agency mortgage-backed securities — — 53,454 234,640 53,454 234,640 Agency commercial mortgage-backed securities — — 18,444 69,858 18,444 69,858 Corporate bonds — — 4,193 33,733 4,193 33,733 Other bonds and obligations — — 66 295 66 295 Total securities available for sale $ 195 $ 30,582 $ 144,815 $ 579,378 $ 145,010 $ 609,960

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